MIRA INFORM REPORT

Report Date :

21.04.2012

IDENTIFICATION DETAILS

Name :	LOYAL TEXTILE MILLS LIMITED
Registered Office :	21/4, Mill Street, Kovilpatti-628501, Tamilnadu
Country :	India
Financials (as on) :	31.03.2011
Date of Incorporation :	09.04.1946
Com. Reg. No.:	18-1361
Capital Investment / Paid-up Capital :	Rs.48.164 Millions
CIN No.: [Company Identification No.]	L17111TN1946PLC001361
TAN No.: [Tax Deduction & Collection Account No.]	MRIL00006G
Legal Form :	Public Limited Liability Company. The company’s shares are listed on the Stock Exchanges.
Line of Business :	Manufacturer of Cotton Textile Mills, Readymade Garments, Finished Fabrics, Grey Fabrics, and Yarn.
No. of Employees :	8000 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

Ba (52)

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Maximum Credit Limit :	USD 4400000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established company having fine track. Financial position appears to be sound. Trade relations are reported as fair. Business is active. Payments are reported to be regular and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – September 30, 2011

Country Name	Previous Rating (30.06.2011)	Current Rating (30.09.2011)
India	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

LOCATIONS

Registered Office :	21/4, Mill Street, Kovilpatti-628501, Tamilnadu, India
Tel. No.:	91-44-28535111 / 4375 / 28588284 91-4632-220001
Fax No.:	91-44-2853 3852
E-Mail :	loyal@giasmd01.vsnl.net.in loyal@vsnl.com secretarial@loyaltextile.com loyal@loyaltextiles.com kpl@loyaltextiles.com
Website :	http://www.loyaltextiles.com
Area :	3500Sq.ft.
Location :	Owned
Corporate Office :	New No.83/41, 1st Main Road, R A Puram, Chennai-600028, Tamilnadu, India
Tel. No.:	91-44-45120101 / 42277374
Fax No.:	91-44-42277374
Division/ Unit :	Valli Textile Mills N. Venkateswarapuram, N. Subbiahpuram, Post Sattur-626205 Tamilnadu, India Loyal Super Fabrics C-7-1, Sipcot Complex, Kudikadu, Cuddalore-607005, Tamilnadu, India Ginning Division APIIC Industrial Park, Talladha, Khammam District, Andhra Pradesh, India Shri Chintamani Textile Mills (Private) Limited Arasanur, Thirumancholai - 630 561, Sivagangai Taluk, Tamilnadu, India Menakur SEZ Park, Naidupettah, Nellore District, Andhra Pradesh India
Overseas Office :	UK Loyal Textiles (Uk) Limited, Church Cottage, Main Street, Ingoldsby, Lincs. Ng33 4ej Germany Schaefer Loyal Alter Postweg 101 D-86159, Germany

DIRECTORS

As on 27.05.2011

Name :

Mr. Manickam Ramaswami

Designation :

Chairman and Managing Director

Address :

Satyanarayana Avenue, Boat Club Road, Chennai - 600 028, Tamilnadu, India

Date of Birth/Age :

20.11.1953

Qualification :

B. Tech.

Date of Appointment :

01.06.1979

DIN No :

00049630

Other Directorship:

S. No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Date of cessation	Company Status	Defaulting status
1	L17111TN1946PLC001361	LOYAL TEXTILE MILLS LIMITED	Managing director	01-06-08	01-06-79	-	Active	NO
2	U17120MH1967PLC013669	CONFEDERATION OF INDIAN TEXTILE INDUSTRY	Director	21-08-88	21-08-88	-	Active	NO
3	U52321TN1995PTC031290	HELLEN COTTON TRADING COMPANY PRIVATE LIMITED	Director	03-06-97	03-06-97	-	Active	NO
4	U52321TN1995PTC031289	NIKE COTTON TRADERS PRIVATE LIMITED	Director	03-06-97	03-06-97	31-03-10	Active	NO
5	U52599TN1995PTC031295	RHEA COTTON TRADERS PRIVATE LIMITED	Director	03-06-97	03-06-97	-	Active	NO
6	U52599TN1995PTC031292	NEMESIS COTTON TRADING COMPANY PRIVATE LIMITED	Director	03-06-97	03-06-97	-	Active	NO
7	U91110MH1954NPL009385	THE COTTON TEXTILES EXPORT PROMOTION COUNCIL	Director	30-09-02	30-09-02	-	Active	NO
8	U01712TZ2005PLC012329	SIMA TEXTILE PROCESSING CENTRE LIMITED	Director	07-12-05	07-12-05	-	Active	NO
9	U93090TN1983SGC010512	TAMILNADU CORPORATION FOR DEVELOPMENT OF WOMEN LIMITED	Director	22-09-08	22-09-08	14-07-09	Active	NO

Name :

Mr. Karangalpadi Jathindra Mohan Shetty (I.A.S. – Retd.)

Designation :

Director

Address :

F-88, Anna Nagar East, Chennai-600102, Tamil Nadu, India

Date of Birth/Age :

03.03.1934

Date of Appointment :

21.06.2002

DIN No :

00033296

Other Directorship:

S. No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Date of cessation	Company Status	Defaulting status
1	U36999TZ1992PLC003662	ROOTS MULTI CLEAN LIMITED	Director	16-07-93	16-07-93	28-03-10	Active	NO
2	U72200TN2001PTC046986	SAVANT INDIA INSTITUTE OF TECHNOLOGY PRIVATE LIMITED	Director	18-04-01	18-04-01	-	Active	NO
3	L36991TN1990PLC019944	JUMBO BAG LIMITED	Director	28-05-02	28-05-02	-	Active	NO
4	L17111TN1946PLC001361	LOYAL TEXTILE MILLS LIMITED	Director	21-06-02	21-06-02	-	Active	NO
5	L74899MH1994PLC164024	GATEWAY DISTRIPARKS LIMITED	Director	16-06-04	16-06-04	-	Active	NO
6	U35111KA1994PTC020576	GATEWAY DISTRIPARKS (SOUTH) PRIVATE LIMITED	Director	30-11-04	30-11-04	-	Active	NO
7	L72200TN1978PLC058225	SAVANT INFOCOMM LIMITED	Director	29-11-05	29-11-05	15-10-07	Active	NO
8	U72200TN2006PTC060355	OPUS IT SERVICES INDIA PRIVATE LIMITED	Director	11-07-06	11-07-06	15-12-07	Active	NO
9	U17111TN1982PLC009317	SHRI CHINTAMANI TEXTILE MILLS LIMITED	Director	29-09-09	02-11-08	16-08-10	Amalgamated	NO
10	U74140TN2000PTC045736	VKS SOLUTIONS PRIVATE LIMITED	Director	19-07-11	19-07-11	-	Active	NO
11	U26914KA1994PTC016130	ENDEKA CERAMICS INDIA PRIVATE LIMITED	Director	28-09-11	22-07-11	-	Active	NO

Name :

Mr. S. Venkataramani

Designation :

Director

Address :

No.16, Venkateshwarnagar, III Street, Adyar, Chennai-600020, Tamil Nadu, India

Date of Birth/Age :

05.10.1942

Date of Appointment :

29.10.2004

DIN No :

00053043

Other Directorship:

S. No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Date of cessation	Company Status	Defaulting status
1	U63040TN1950PTC000221	BHARAT TRAVEL SERVICE PRIVATE LIMITED	Director	02-09-04	02-09-04	-	Active	NO
2	L17111TN1946PLC001361	LOYAL TEXTILE MILLS LIMITED	Director	29-10-04	29-10-04	-	Active	NO
3	L99999MH1962PLC012549	TULIVE DEVELOPERS LIMITED	Director	25-04-05	25-04-05	-	Active	NO
4	L93090TN1979PLC032618	MARIS SPINNERS LIMITED	Director	14-11-05	14-11-05	-	Active	NO
5	U01111TZ1973PTC000662	NILGIRI AGRO AGENCIES PRIVATE LIMITED	Director	17-12-05	17-12-05	-	Active	NO
6	U45201TN1995PTC029899	MARIS ENTERPRISES PRIVATE LIMITED	Director	01-12-06	01-12-06	-	Active	NO
7	U51909TN1961PTC044552	JANATHA TRADERS INDIA PRIVATE LIMITED	Director	01-12-06	01-12-06	-	Active	NO
8	U17111TN1982PLC009317	SHRI CHINTAMANI TEXTILE MILLS LIMITED	Director	29-09-09	02-11-08	16-08-10	Amalgamated	NO

Name :

Mr. R. Poornalinggam (I.A.S. – Retd.)

Designation :

Director

Address :

No.10, 1^st Cross Street, Indira Nagar, Chnnai-600020, Tamil Nadu, India

Date of Birth/Age :

15.11.1945

Date of Appointment :

27.10.2006

DIN No :

00955742

Other Directorship:

S. No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Date of cessation	Company Status	Defaulting status
1	U74899DL2005PTC142561	C-DOT ALCATEL-LUCENT RESEARCH CENTRE PRIVATE LIMITED	Director	04-07-06	04-07-06	16-09-09	Active	NO
2	L17111TN1946PLC001361	LOYAL TEXTILE MILLS LIMITED	Additional director	27-10-06	27-10-06	-	Active	NO
3	U74999TN1997PLC039523	TIDEL PARK LIMITED	Director	09-12-06	09-12-06	23-06-11	Active	NO
4	U40109AP2006PTC052129	REGEN POWERTECH PRIVATE LIMITED	Nominee director	24-10-07	24-10-07	16-03-09	Active	NO
5	U70101AP2001PTC038151	NSL SEZ (CHENNAI) PRIVATE LIMITED	Managing director	01-01-08	01-01-08	30-06-08	Active	NO
6	U45200AP2005PTC045511	NSL NAGAPATNAM POWER AND INFRATECH PRIVATE LIMITED	Additional director	25-04-08	25-04-08	04-03-09	Active	NO
7	U15429AP2002PLC038489	NSL TEXTILES LIMITED	Director	19-07-08	22-06-08	04-03-09	Active	NO
8	L74999TZ1984PLC001456	TITAN INDUSTRIES LIMITED	Director	27-07-09	30-03-09	-	Active	NO
9	U45209TN1998PLC040572	TAMIL NADU ROAD DEVELOPMENT COMPANY LIMITED	Director	16-09-10	15-12-09	10-06-11	Active	NO
10	U74899DL1968PLC004866	NATIONAL TEXTILE CORPN LIMITED	Director	18-06-10	18-06-10	-	Active	NO
11	U40100TN2008PTC069515	NAGAPATTINAM ENERGY PRIVATE LIMITED	Director	23-06-11	11-01-11	-	Active	NO

Name :

Mr. P. Manivannan

Designation :

Director

Address :

3 G, Kala Apartments, No.02, Karunanithi Street, West Mambalam, Chennai-600033, Tamil Nadu, India

Date of Birth/Age :

23.06.1961

Date of Appointment :

01.11.2008

DIN No :

00366954

Other Directorship:

S. No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Date of cessation	Company Status	Defaulting status
1	U17111TN1992PLC023836	SHRI TEYEM PROCESSORS LIMITED	Director	29-06-00	29-06-00	31-10-08	Active	NO
2	U18101TN1993PTC024516	VISHALA APPARELS PRIVATE LIMITED	Director	29-06-00	29-06-00	31-10-08	Active	NO
3	U17111TN1982PLC009317	SHRI CHINTAMANI TEXTILE MILLS LIMITED	Director	12-07-00	12-07-00	-	Amalgamated	NO
4	L17111TN1946PLC001361	LOYAL TEXTILE MILLS LIMITED	Whole-time director	02-09-09	01-11-08	-	Active	NO

Name :

Mr. Shridhar Subramanyam

Designation :

Director

Address :

Flat No.106, Olympus III, Prestige Acropolis, 20, Hosur Road, Banglore-560029, Karnataka, India

Date of Birth/Age :

21.02.1939

Date of Appointment :

23.05.2007

DIN No :

01780475

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 31.03.2012

Category of Shareholder	Total No. of Shares	Total Shareholding as a % of total No. of Shares
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	197,647	4.10
Bodies Corporate	3,325,826	69.05
Sub Total	3,523,473	73.16
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	3,523,473	73.16
(B) Public Shareholding
(1) Institutions
Financial Institutions / Banks	5,200	0.11
Sub Total	5,200	0.11
(2) Non-Institutions
Bodies Corporate	200,714	4.17
Individuals
Individual shareholders holding nominal share capital up to Rs.0.100 Million	794,138	16.49
Individual shareholders holding nominal share capital in excess of Rs.0.100 Million	255,772	5.31
Any Others (Specify)	37,149	0.77
Non Resident Indians	37,149	0.77
Sub Total	1,287,773	26.74
Total Public shareholding (B)	1,292,973	26.84
Total (A)+(B)	4,816,446	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued	-	-
(1) Promoter and Promoter Group	-	-
(2) Public	-	-
Sub Total	-	-
Total (A)+(B)+(C)	4,816,446	-

BUSINESS DETAILS

Line of Business :

Manufacturer of Cotton Textile Mills, Readymade Garments, Finished Fabrics, Grey Fabrics, and Yarn.

Products :

ITEM CODE NO. (ITC CODE)	PRODUCT DESCRIPTION
5202, 5203, 5204, 5205, 5206, 5207, 5208, 5209 5210, 5211, 5212, 5301, 5306, 5308, 5309, 5311, 5503, 5504, 5505, 5506, 5507, 5509 5510, 5511, 5512, 5513, 5514, 6001 6203, 6204	Textiles falling within the above Code Nos.

PRODUCTION STATUS [AS ON 31.03.2011]

Particulars	Unit	Installed Capacity
Ring Spindles	Nos.	154973
Rotors	Nos.	4080
Automatic Looms	Nos.	250
Cloth Processing	Mtrs.	14400000
Hosiery Processing	Kgs.	6400000
Sewing Machines	Nos.	850
Knitting Machines	Nos.	126

ACTUAL PRODUCTION:

Particulars	Unit	Actual Production
Yarn (4485440 Kgs. manufactured by outsiders) (previous year 4221839.41 kgs.) of which 10350.80 kgs. were processed (previous year 11317.10 kgs.)	Kgs.	22514
Cloth net of shrinkage (566415 metree manufactured by outsiders) (previous year 2184279.00 mtrs) of which 3483773.80 mtrs. were processed. (previous year 3371446.70 mtrs.)	Mtrs.	28815
Hosiery cloth (including produced by others) of which 769918.28 kgs. were processed (Previous year 567567.25 kgs.)	Kgs.	12009

GENERAL INFORMATION

No. of Employees :

8000 (Approximately)

Bankers :

· Export Import Bank of India

· Central Bank of India

· State Bank of India

· Karur Vysya Bank Limited

· Indian Bank

· State Bank of Mysore

· Indian Overseas Bank

Facilities :

Secured Loan	As on 31.03.2011 [Rs. in Millions]	As on 31.03.2010 [Rs. in Millions]
Term Loan
From Financial Institutions (including interest accrued thereon)	341.316	86.866
From Banks	3342.326	2515.176
Working Capital Loans from Banks	2681.265	972.907
Total	6364.907	3574.949
NOTE: Term loans are secured by Joint and equitable mortgage of all immovable properties, present and future, and by hypothecation of machineries ranking pari passu with one another. Working Capital loans from Banks are secured by hypothecation of raw materials, stock in process, finished goods, stores, consumables, spares and book debts and are also secured by a second charge on block assets. Guarantee: Term loans and working capital loans are guaranteed by the Chairman and Managing Director.
Unsecured Loan	As on 31.03.2011 [Rs. in Millions]	As on 31.03.2010 [Rs. in Millions]
Fixed Deposits	3.051	2.466
Interest accrued and due on fixed deposits	0.184	0.245
Total	3.235	2.711

Banking Relations :	--
Auditors :
Name :	Suri and Company Chartered Accountants
Address :	Madurai, Tamilnadu, India
Associates/Subsidiaries :	v Loyal Textiles (UK) Limited v Uniloyal Expotex Limited, Chennai, Tamilnadu v Loyal Dimco Grouppo S. A. , Greece v Shri Teyem Pricemill Limited v Gruppo P and P Loyal Italy

CAPITAL STRUCTURE

As on 31.03.2011

Authorised Capital :

No. of Shares	Type	Value	Amount
9000000	Equity Shares	Rs.10/- each	Rs.90.000 Millions
600000	Redeemable Cumulative Preferences Shares	Rs.100/- each	Rs.60.000 Millions
	Total		Rs.150. 000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
4703946	Equity Shares	Rs.10/- each	Rs.47.039 Millions
	Share Capital Suspense Account		Rs.1.125 Millions
	Total		Rs.48.164 Millions

NOTE:

Equity Shares of the above

I. 2769970 Equity Shares of Rs.10/- each were issued as fully paid up Bonus Shares by way of Capitalizing part of General Reserve.

II. 60000 Equity Shares of Rs.10/- each were issued as fully paid up shares pursuant to a scheme of Reorganization of Capital Structure without the payment being received in Cash.

III. 1538266 Equity Shares of Rs.10/- each were issued as fully paid up shares pursuant to amalgamation of “Valli Cotton Traders Limited” and “Loyal Super Fabrics Limited”.

IV. Share capital suspense account 112500 equity shares of Rs.10 each to be issued as fully paid shares to the erstwhile share holders of Shri Chintamani Textll Mills Limited pursuant to the scheme of amalgamation sanctioned by the Madras High Court vide its order date 11.04.2011.

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2011	31.03.2010	31.03.2009
SHAREHOLDERS FUNDS
1] Share Capital		48.164	47.040	47.040
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		1065.581	789.170	785.954
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		1113.745	836.210	832.994
LOAN FUNDS
1] Secured Loans		6264.907	3574.949	3920.497
2] Unsecured Loans		3.235	2.711	4.219
TOTAL BORROWING		6268.142	3577.660	3924.716
DEFERRED TAX LIABILITIES		318.209	231.160	230.778
TOTAL		7700.096	4645.030	4988.488
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		3827.317	2650.079	3041.521
Capital work-in-progress		388.792	12.794	13.870
INVESTMENT		35.775	18.019	18.019
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	2305.576	1110.203	920.857
	Sundry Debtors	752.272	671.415	810.591
	Cash & Bank Balances	44.383	30.950	17.635
	Other Current Assets	106.444	96.023	91.347
	Loans & Advances	1289.118	534.923	407.819
Total Current Assets		4497.793	2443.514	2248.249
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	1004.006	449.416	316.268
	Other Current Liabilities	9.310	4.686	5.169
	Provisions	36.265	25.274	11.734
Total Current Liabilities		1049.581	479.376	333.171
Net Current Assets		3448.212	1964.138	1915.078
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		7700.096	4645.030	4988.488

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2011	31.03.2010	31.03.2009
	SALES
		Income	9391.042	4440.834	4405.484
		Other Income	359.645	194.326	18.886
		TOTAL (A)	9750.687	4635.160	4424.370
Less	EXPENSES
		Raw Material Consumed		2128.135	2074.605
		Conversion and Processing Charges		183.409	198.033
		Stores Consumed		192.300	213.515
		Purchase of Item traded/ processed		277.400	413.212
		Power & Fuel	8472.714	297.043	304.219
		Salaries, Wages, Bonus, etc.		279.874	240.695
		Repairs & Maintenance		134.064	129.716
		Other Expenditure		371.837	389.868
		Increase/(Decrease) in Finished Goods		81.250	(3.822)
		TOTAL (B)	8472.714	3945.312	3960.041
Less	PROFIT / (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		1277.973	689.848	464.329
Less	FINANCIAL EXPENSES (D)		239.457	211.318	221.239
	PROFIT / (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		1038.516	478.530	243.090
Less/ Add	DEPRECIATION/ AMORTISATION (F)		503.896	448.606	453.187
	PROFIT / (LOSS) BEFORE TAX (E-F) (G)		534.620	29.924	(210.097)
Less	TAX (H)		220.952	10.252	351.414
	PROFIT / (LOSS) AFTER TAX (G-H) (I)		313.668	19.672	(141.317)
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		37.178	0.000	49.034
Less	APPROPRIATIONS
		Transfer to General Reserve	32.000	2.000	(92.283)
		Proposed divided on equity shares	18.784	14.112	0.000
		Provision for tax on distributed profits	2.959	2.344	0.000
		Interim Dividend	47.039	0.000	0.000
		Dividend Distribution tax	7.813	0.000	0.000
	BALANCE CARRIED TO THE B/S		242.251	1.216	0.000
	EARNINGS IN FOREIGN CURRENCY
		Export Earnings	7441.897	2810.101	2681.329
	IMPORTS
		Raw Materials	11.232	420.318	568.259
		Capital Goods	431.180	28.563	158.631
		Stores & Spares	19.754	82.521	47.566
	TOTAL IMPORTS		462.166	531.402	774.456
	Earnings / (Loss) Per Share (Rs.)		66.12	4.18	(30.04)

QUARTERLY RESULTS

PARTICULARS	30.06.2011	30.09.2011	31.12.2011
Type	1^st Quarter	2^nd Quarter	3^rd Quarter
Net Sales	3082.100	2227.500	1706.200
Total Expenditure	2819.900	1960.000	1464.600
PBIDT (Excl OI)	262.200	267.500	241.600
Other Income	23.600	19.300	(0.500)
Operating Profit	285.800	286.800	241.200
Interest	109.200	96.500	118.300
PBDT	176.60	190.300	122.900
Depreciation	153.2000	158.300	175.700
Profit Before Tax	23.40	32.00	(52.800)
Tax	7.900	12.100	(19.100)
Profit After Tax	15.500	19.900	(33.700)
Net Profit	15.500	19.900	(33.700)

KEY RATIOS

PARTICULARS		31.03.2011	31.03.2010	31.03.2009
PAT / Total Income	(%)	3.22	0.42	(3.19)
Net Profit Margin (PBT/Sales)	(%)	5.69	0.67	(4.77)
Return on Total Assets (PBT/Total Assets}	(%)	6.42	0.59	(3.97)
Return on Investment (ROI) (PBT/Networth)		0.48	0.04	(0.25)
Debt Equity Ratio (Total Liability/Networth)		6.57	4.85	5.11
Current Ratio (Current Asset/Current Liability)		4.29	5.10	6.75

LOCAL AGENCY FURTHER INFORMATION

Check List by Info Agents	Available in Report (Yes / No)
1) Year of Establishment	Yes
2) Locality of the firm	Yes
3) Constitutions of the firm	Yes
4) Premises details	Yes
5) Type of Business	Yes
6) Line of Business	Yes
7) Promoter’s background	Yes
8) No. of employees	Yes
9) Name of person contacted	No
10) Designation of contact person	No
11) Turnover of firm for last three years	Yes
12) Profitability for last three years	Yes
13) Reasons for variation <> 20%	--
14) Estimation for coming financial year	No
15) Capital in the business	Yes
16) Details of sister concerns	Yes
17) Major suppliers	No
18) Major customers	No
19) Payments terms	No
20) Export / Import details (if applicable)	No
21) Market information	--
22) Litigations that the firm / promoter involved in	--
23) Banking Details	Yes
24) Banking facility details	Yes
25) Conduct of the banking account	--
26) Buyer visit details	--
27) Financials, if provided	Yes
28) Incorporation details, if applicable	Yes
29) Last accounts filed at ROC	Yes
30) Major Shareholders, if available	Yes

HISTORY:

Subject, the Tamil Nadu based company was incorporated in 1946 and has it's plant at Kovilpatti. It manufactures cotton yarn, fabric, hosiery cloth, caps etc. It exports yarn and cloth to the US, Russia, Germany, Spain, Switzerland, UK, Portugal and other countries. The company exports around 27% of its production. Loyal Textiles was the first to introduce tandem carding in the early seventies, and the earliest to introduce air splicing and automatic cone winding technology, which allows sophisticated electronic controls to detect and mend defects in yarn automatically. The company undertook modernization of it's facility. In 1987, the company has embarked upon an expansion-cum-modernization project and set up 100 air-jet looms for weaving polyester-blended suiting’s. The looms were supplied by Loyal Machine Works, a subsidiary. Again in 1998-99, it increased the installed capacity of ring spindles, rotors and automatic looms to 53,492 nos, 3,768 nos and 285 nos respectively. The company has spent Rs.173.300 millions, Rs.53.900 millions and Rs.133.700 millions on modernization and replacement of machinery during 1998-99, 99-2000 and 2000-01 respectively. The company had set up an Joint Venture company in Italy in the name of M/s Gruppo PandP Loyal Spa. In the year 2000-01, the company has increased it's stake in the JV company to 47.50 %. Apart from this the company has also entered into a JV agreement with M/s Dimco SA, Greece for formation of a JV company in Greece for marketing of Garments during 2000-01. For replacement of machinery/ modernization and installing power plant the company has spent about Rs.335.844 millions.

PERFORMANCE REVIEW, MANAGEMENT DISCUSSION, ANALYSIS REPORT AND OUTLOOK FOR THE CURRENT YEAR:

The current financial year 2011-2012 will be an extremely challenging one, especially the first half, for the spinning mills in particular and textile mills in general, as the cost of cotton, yarn

The year has been a water shed for Indian spinning industry in particular and the textile industry in general.

The Government of India restricted its cotton exports and created a disconnect between Indian cotton prices and global cotton prices. India cotton ruled at 15 to 20 % lower than international prices, and this substantially helped the spinning mills to post record profits.

By the same token the government later banned yarn exports for three and a half months. which has led to unprecedented losses to spinning mills starting from March of 2011 and the losses will last until October 2011; many mills may incur more losses than what they gained through the availability of cheaper cotton.

They have always aligned their interest with that of the country, although it was temporarily much more profitable to stay with spinning, and expand spinning, they felt that the country will need more weaving and knitting capacities. With increasing wages more and more of India’s large power loom capacity will become redundant and with demand for longer piece length of defect free cloth, the demand for high quality weaving will keep going up. Realizing this medium term reality, at Loyal They have concentrated on adding fabric making capacities ; by end of the calendar year They would have almost doubled both weaving and kniting capacities. Thanks to their policy of aligning with what is good for the country and not what is best suited as per the distorted Government policies at that point of time, which swing from one extreme of incentivized exports of subsidized cotton to total ban on exports of cotton or irrationally high DEPB to total withdrawal of all draw back on cotton yarn, They are experiencing a more balanced working.

During the review period they had severe power cuts and load shedding all of which cost us huge additional costs. Additional costs were incurred due to purchase of very expensive third party power, in order to overcome this additional cost as well as to have control over power costs despite SEB's raising the tariff from time to time, They have invested Rs.540.000 Millions in wind mills which would add 60,000/-units per day on an average to their own generation, in addition they have taken up several initiatives to reduce specific power consumption.

During this financial year they will not need to purchase any third party power and would be saving several crores of rupees spent during the last financial year.

Wage costs are rising steeply and availability of work force to work in all 3 shifts is getting more and more difficult, in order to overcome the problems caused by this factor, they are increasing the automation and increasing the sewing machine capacity to get maximum output during the day shift itself.

And fabrics has dropped by 50%to20%; and the calculated loss for the textile industry in India alone is 2 billion $ and almost another 2 billion to textile companies in Asia, Indian Governments policy of banning cotton exports first and later yarn exports has been mainly responsible for this disaster, given India’s prominent position in global trade in these two commodities.

The Global demand destruction caused due the faulty policies of the Indian Government is seriously impacting the industry globally. In addition the high interest rate together with slow industrial growth is affecting the inclusive growth and the surplus available with the poor is dropping which in turn affects textile off take in the domestic markets. Prices have started dropping rapidly. When the new prices reach the retail counters and demand gets restored they will see improvements in off take and prices. It is expected, given the inventories with the mills and trade, the improvement will happen during the second half of the financial year.

They will however be able to weather the storm and post profits as they have always aligned their policies with what is good for the Nation and resisted the temptation of aligning their policies with the irrational and temporary benefits given to differ end sectors from time to time extreme swings.

The turnover increased from Rs.4624.900 Millions to 9624.500 Millions. It was possible due to increased volume of trade as well as due to the substantial increase in unit value due to inflation. Exports accounted for 7698.600 Millions, they won the award for the highest export of grey fabrics for the 4 years in row and expect to win it again for the current year's performance as well.

They have invested Rs 561.400 Millions in their existing facilities to improve quality, and to reduce labour dependence and power consumption, Rs.540.000 Millions in wind mills and Rs.670.900 Millions in their new unit in the state of Andhra Pradesh, which has several advantages over Tamilnadu such as lower cost of power, less power interruption and load shedding, transparent grid administration, lower cost of labour, lower cost of cotton as AP is a cotton surplus state. When completed AP plant will have 200 looms and enough spinning to produce the required warp yarns. Weft yarns can be sourced from the many mills in the vicinity. Industrial relations; The Company has cordial industrial relations at all its plants, the total employee strength stands at 4475.

FINANCE:

During the year, the Company availed term loans to the tune of Rs. 1360.600 Millions and repaid loans, to the extent of Rs. 286.000 Millions to Banks/ Financial institutions.

FIXED ASSETS:

· Land

· Buildings

· Furniture

· Plant and Machinery

· Vehicles

WEBSITE DETAILS:

COMPANY PROFILE:

Committed to philanthropy and socio-environmental development, Loyal Group is a multi-faceted organization, providing an array of products and services for textile and apparel industries. In more than its seven decades of establishment, the Group has created several benchmarks and established milestones for the forthcoming generations.

Loyal Group comprises of two composite mills, one spinning mill, one dye house, three garment manufacturing units, one trading cum retailing company and two international trading companies (a Joint Venture with an Italian firm and a 100% owned trading company in United Kingdom). Besides, the Group has in its fold the 158-year-old watch trading company "P'orr and Sons", which has 8 operational stores in Tamil Nadu and Andhra Pradesh (India).

An ISO 9002:2000 accredited, The Loyal Group follows a strict ethical code of conducts in its business operations. The Group's annual turnover is Rs.4,500 million (US$ 110 Million), out of which, Rs.3,000 million

(US$ 75 Million) revenue was generated from exports. Loyal Group exports products to various countries which includes Israel, Egypt, Turkey, U S A, EU Countries, United kingdom, Japan, Thailand, South Korea, Dubai,

Sri Lanka, Bangladesh, Brazil, Argentina, Columbia.

In recognition of its continual improvement in export performance, the Government of India has awarded Group with "Three Star Export House". Over the years, the group has been credited with several accolades and awards in recognition of its consistent export performance

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.52.00
UK Pound	1	Rs.83.54
Euro	1	Rs.68.40

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	7
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	6
--PROFITABILIRY	1~10	6
--LIQUIDITY	1~10	6
--LEVERAGE	1~10	6
--RESERVES	1~10	5
--CREDIT LINES	1~10	4
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	NO
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		52

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
-	NB	New Business	-

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.